Sea

Sea Limited reported Q1 earnings that beat consensus estimates on revenue & EPS. It was a relief as SE stock was battered over the past 6 months.

Come and join our community of investors as we navigate the ups and down of the market together. We own our best ideas and have skin in the game. Disclosure: I/we have a beneficial long position in the shares of SE either through stock ownership, options, or other derivatives. Upon subscription, you will have access to all of our investing resources. While these are encouraging signs, the longer-term impact of reopening around online gaming and Free Fire specifically remains to be seen, and we will continue to focus on user engagement and user base stabilization. Therefore, we urge investors to carefully monitor its progress over the next few quarters. Therefore, we urge investors to bide their time and wait for a consolidation phase before adding exposure. Furthermore, our price action analysis indicates that the stock could still face a potential "ultimate" bottom test, with several layers of resistance to impede its re-rating. We saw some preliminary signs that this is starting to bear fruit with the monthly user trends for Free Fire beginning to show some early signs of stabilizing towards the end of the first quarter. As a result, we believe that the consensus estimates (from FQ2 onwards) could be revised subsequently to reflect Sea's stronger than estimated profitability performance. Its cash cow Garena continues to experience slowing growth as the economies reopen. But, Sea Limited is charting a new (slower growth) phase that could be challenging to execute, given the macro and micro headwinds.